Wegman Law Client Spotlight – Bettcher Industries, Inc.
Bettcher Industries, Inc. (“Bettcher”), headquartered in Birmingham, Ohio, and founded in 1944, a leading worldwide manufacturer of food processing, foodservice equipment, and medical devices, recently received a significant equity investment from Morgenthaler Private Equity (“MPE Partners”) as part of an October 2017 recapitalization transaction. This transaction involved multiple parties, with various financial interests, and Wegman Law was instrumental in coordinating the Bettcher transaction through closing. The existing Bettcher Employee Stock Ownership Plan (“ESOP”) will retain a significant minority ownership stake in Bettcher, along with the new cash investment by MPE Partners and Bettcher management. The recapitalization and new investment provides Bettcher with access to additional capital and resources as it continues to execute its growth plans, including actively seeking strategic add-on acquisitions. The entire management team and structure of Bettcher remains unchanged, with the business continuing to be led by Don Esch, it’s President and CEO.
Bettcher designs, manufacturers and services high precision cutting tools for the meat-processing and medical markets. Serving customers in more than 70 countries, Bettcher has global sales offices in Europe, China, and Brazil and primarily serves the protein processing and foodservice industries. Through Bettcher’s subsidiary, Gainco, Inc. (“Gainco”), Bettcher manufactures equipment and systems for sizing, weighing, and sorting food products in processing plants. In 2011, Bettcher formed its Exsurco Medical, Inc. subsidiary (“Exsurco”), successfully developing and commercializing advanced devises used for excision and debridement in tissue banking and surgical procedures.
This strategic move with MPE Partners positions Bettcher to accelerate it’s growth and further expand its market activities, even as it continues to operate all of the existing businesses as before. The day-to-day operations of Bettcher and its subsidiary companies, Gainco and Exsurco, are unaffected by the ownership change.
Wegman Law served as legal counsel to Bettcher, working closely with its previous sole owner, the ESOP, and management team throughout the recapitalization and transition process. The Wegman Law team was integrally involved in each step of the process and guided Bettcher and its management group to a successful transaction outcome. From a legal and deal perspective, the transaction was unique, in that it is unusual for a private equity firm to buy a majority stake in an ESOP company while having the ESOP remain in place as a minority owner. This structure allows the Bettcher ESOP participants to continue to enjoy a tax-favored reward as the Bettcher business grows and prospers in the future.
Wegman Law looks forward to working with the Bettcher management team as they execute Bettcher’s multi-faceted growth plan, including actively seeking add-on acquisitions. Bettcher’s market reputation, including best-in-class manufacturing and devoted customer service, will help it assure ongoing success as it partners with MPE Partners.